Growth stocks are companies that are likely to have sales and earnings growth well above market average. Frequently they pay few, if any, dividends. Instead they typically reinvest any extra cash flow to promote further growth. Chosen wisely—according to Pat McKeough’s advice—high-quality growth-oriented stocks can be worthwhile additions to most well-diversified portfolios.
Although growth stock picks can be highly volatile, they can make good long-term investments. They may be well-known stars or quiet gems, but they do share one common attribute—they are growing at a higher-than-average rate within their industry, or within the market as a whole, and could keep growing for years or decades.
And keep in mind that we focus on growth stocks, which have a good long-term history and favourable prospects. We downplay momentum stocks that tend to attract many investors simply because they are moving faster than the market averages, but are liable to fall sharply when their momentum fades.
There’s room for growth stock investing in your portfolio, but make sure you follow our TSI Network three-part Successful Investor strategy for your overall portfolio:
Invest mainly in well-established companies;
Spread your money out across most if not all of the five main economic sectors (Manufacturing & Industry; Resources & Commodities; Consumer; Finance; Utilities);
Downplay or avoid stocks in the broker/media limelight.
Make better stock picks when you read this FREE Special Report, Canadian Growth Stocks: WestJet Stock, RioCan Stock and More.
You should remain wary of stocks that attract broker/media attention because of high-profile products or services, and their business models. Here’s a closer look at one stock with risks that prospective investors should take into consideration:
POLLARD BANKNOTE, $22.00, (Toronto symbol PBL; TSINetwork Rating: Extra Risk) (pollardbanknote.com; Shares… Read More
Artificial intelligence (AI) is an example of an investment idea that could boost your investment returns, or, more likely, end up costing you money. All in all, we think that the biggest, surest gains from AI will come from investing in established businesses that are… Read More
Goodyear’s outlook is positive. This includes making significant investments in future tire technologies, including for EVs. Meantime, its involvement with activist Elliott Management draws attention to its prospects.
GOODYEAR TIRE & RUBBER, $8.68, is a buy. The manufacturer (Nasdaq symbol GT; TSINetwork Rating: Extra Risk) (Shares outstanding: 284.7… Read More
RESMED INC., $224.30, is a buy. The company (New York symbol RMD; TSINetwork Rating: Average) (www.resmed.com; Shares outstanding: 146.9 million; Market cap: $33.0 billion; Dividend yield: 1.0%) fell in June 2024 from around $215 to as low as $180.
The stock dropped after drugmaker Eli Lilly said that its… Read More
Alimentation Couche-Tard has made some major acquisitions over the last decade or so—it just announced a couple more. Growth by acquisition adds risk. However, the company has a long record of successfully integrating those businesses. Meanwhile, it’s well-positioned to keep prospering in both its core… Read More
Thanks to its improving prospects and solid dividend, we transferred Toromont to our flagship Successful Investor newsletter from our Stock Pickers Digest (now Power Growth Investor) newsletter in June 2018. Since then, the stock has gained an impressive 116%. We feel higher government spending on infrastructure… Read More
CAE INC. $24 is still a buy for long-term gains. The company (Toronto symbol CAE; Conservative Growth Portfolio, Manufacturing & Industry sector; Shares outstanding: 318.1 million; Market cap: $7.6 billion; Price-to-sales ratio: 1.7; Dividend suspended in March 2020; TSINetwork Rating: Average; www.cae.com) is a leading maker of flight… Read More
THOMSON REUTERS CORP. $227 is a buy. The company (Toronto symbol TRI; Conservative Growth Portfolio, Manufacturing & Industry sector; Shares outstanding: 449.7 million; Market cap: $102.1 billion; Price-to-sales ratio: 10.5; Dividend yield: 1.3%; TSINetwork Rating: Above Average; www.thomsonreuters.com) recently sold its remaining stake in London Stock Exchange Group… Read More
Bombardier shares have gained over 450% since the company sold its passenger railcar operations in January 2021. Following the sale, it has focused on its business jets operations. Demand for these products remains strong, but higher costs for materials and labour could squeeze profit margins… Read More
Loblaw’s shares have jumped 40% in the past year; they, in fact, hit a new all-time high of $171.99 on July 24, 2024.
The big gain is partly due to the 2018 transfer of the company’s real estate business to its parent company. That left it… Read More
SIX FLAGS ENTERTAINMENT CORP. $47 (www.sixflags.com) is a hold. The company took its current form on July 1, 2024, through the all-stock merger of rival amusement park operators Cedar Fair L.P. and Six Flags Entertainment. As the new firm does not pay a dividend, we’re moving it from… Read More
YUM CHINA HOLDINGS INC. $29 is a buy for aggressive investors. The company (New York symbol YUMC; Aggressive Growth Portfolio, Consumer Sector; Shares outstanding: 391.0 million; Market cap: $11.3 billion; Price-to-sales ratio: 1.1; Dividend yield: 2.2%; TSINetwork Rating: Average; www.yumchina.com) is China’s largest fast-food operator with over 14,600 outlets,… Read More
IDEXX LABORATORIES INC. $471 is still a hold. The company (Nasdaq symbol IDXX; Aggressive Growth Portfolio, Manufacturing & Industry sector; Shares outstanding: 82.6 million; Market cap: $38.9 billion; Price-to-sales ratio: 10.6; No dividends paid; TSINetwork Rating: Average; www.idexx.com) makes equipment that veterinarians use to detect diseases in animals.
Due… Read More
DANAHER CORP. $266 is a buy for aggressive investors. The company (New York symbol DHR; Aggressive Growth Portfolio; Manufacturing sector; Shares outstanding 722.2 million; Market cap: $192.1 billion; Price-to-sales ratio: 8.4; Dividend yield: 0.4%; TSINetwork Rating: Above Average; www.danaher.com) makes precision-testing equipment and tools for medical research labs… Read More
The shares of these two chipmakers are hitting new highs, due to the rapid spread of new artificial intelligence applications and activist pressure. We feel both can go even higher, but advise only aggressive investors to consider adding them to their portfolios.
NVIDIA CORP. $114 is… Read More
In November 2014, Agilent spun off its electronic testing equipment business as Keysight Technologies. Agilent shareholders received one Keysight share for every two shares they held.
Since the split, Agilent is up over 235% while Keysight has jumped 330%. We feel both are poised for more… Read More
RESTAURANT BRANDS INTERNATIONAL INC. $70 is a buy for aggressive investors. The fast-food operator (New York symbol QSR, Aggressive Growth Portfolio, Consumer sector; Shares outstanding: 447.0 million; Market cap: $31.3 billion; Price-to-sales ratio: 4.5; Dividend yield: 3.3%; TSINetwork Rating: Average; www.rbi.com) 30,125 outlets in over 100 countries: 18,935… Read More
ADOBE INC. $531 remains a buy for aggressive investors. The software maker (Nasdaq symbol ADBE; Aggressive Growth Portfolio, Manufacturing & Industry sector; Shares outstanding: 443.4 million; Market cap: $235.4 billion; Price-to-sales ratio: 12.2; No dividends paid since June 2005; TSINetwork Rating: Average; www.adobe.com) makes software that lets computer… Read More
VISA INC. $254 is a buy. The company (New York symbol V; Conservative Growth Portfolio, Finance sector; Shares outstanding: 2.05 billion; Market cap: $520.7 billion; Price-to-sales ratio: 15.5; Dividend yield: 0.8%; TSINetwork Rating: Above Average; www.visa.comwww.visa.com) operates the world’s largest electronic-payments network. It processes credit, debit, prepaid and… Read More
During the pandemic, both Domino’s Pizza and Texas Roadhouse implemented savvy strategies to support their businesses. Now, going forward, we think each is well-positioned to capitalize on its popular offerings to keep attracting customers. Each stock also remains a buy.
DOMINO’S PIZZA, $473.27 (New York symbol DPZ;… Read More
